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2007

TAX CREDIT FOR DEPENDENT HEALTH BENEFITS PAID

WORKSHEET INSTRUCTIONS

This credit is available to employers that offer a qualiﬁ ed health beneﬁ t plan and that employ fewer than ﬁ ve employees.

This credit is equal to the lesser of 20% of the dependent health beneﬁ ts paid by the employer or $125 per employee with

dependent health coverage. A taxpayer that employs ﬁ ve or more employees after qualifying for the credit may continue to

qualify for the credit for another two years. Otherwise, a taxpayer may claim a credit only for those periods during which the

employer: 1) offers a qualiﬁ ed health beneﬁ t plan that is made available to all of its low-income employees; 2) pays at least

80% of the health insurance costs for each low-income employee under the plan; and 3) pays at least 60% of the cost of

dependent health insurance beneﬁ ts for children under 19 who are dependents of low-income employees under the plan.

The credit is limited to 50% of the regular income tax due. Any unused credit may be carried forward for two years.

“Employer” means entity that employs one or more individuals performing services for it within this State. For a complete

deﬁ nition of “employer,” see 26 M.R.S.A. § 1043.

“Dependent” means a dependent, as deﬁ ned by IRC §152, who is under 19 years of age.

“Dependent health beneﬁ ts” means health beneﬁ ts and health insurance costs allowable as deductions to the employer

under IRC § 105, paid by the taxpayer on behalf of the taxpayer’s low-income employees for the beneﬁ t of the employees’

dependents.

“Health beneﬁ t plan” means a plan that includes comprehensive coverage for at least the following range of beneﬁ ts:

inpatient and outpatient hospital services; physicians’ surgical and medical services; laboratory and x-ray services; and well-

baby and well-child care, including age-appropriate immunizations. The plan must provide coverage that has an actuarial

value no less than 80% of the actuarial value of coverage that is provided to employees of the State of Maine. For purposes

of this paragraph, “actuarial value” means the expected cost of a beneﬁ t based on assumptions as to relevant variables

such as morbidity, mortality, persistency and interest. When comparing the actuarial value of one beneﬁ t or package of

beneﬁ ts to another, both actuarial values must be based on the same assumptions. The plan must also impose copayment

and deductible costs on the employee that do not exceed 10% of the actuarial value of all beneﬁ ts afforded by the plan and

makes the same or comparable coverage available for the beneﬁ t of the employee’s dependent children who are under 19

years of age.

“Low-income employee” means a Maine resident whose average weekly earnings from the employer do not exceed the

State’s average weekly wage as calculated by the Department of Labor.

SPECIFIC LINE INSTRUCTIONS

Please enter the employer name and social security number (“SSN”) or employer identiﬁ cation number (“EIN”).

Note: In the case of pass-through entities (partnerships, LLCs, S corporations, trusts, etc.), the partners, members,

shareholders, beneﬁ ciaries, etc., are allowed a credit in proportion to their respective interest in these entities. Attach

a schedule showing the credit generated by the pass-through entity and the assignment/distribution to each partner,

shareholder, beneﬁ ciary, etc. Include the name, address, and federal ID number of the pass-through entity on the

schedule and the name and SSN/EIN of each partner, shareholder, beneﬁ ciary, etc.

Line 1.

Enter any unused tax credit amounts from previous years. Unused credits may be carried forward for up to

two years.

Line 2.

Enter the total amount paid by the employer to provide dependent health beneﬁ ts in 2007. See deﬁ nition of

“dependent health beneﬁ ts” above.

Line 4.

Enter the total number of employees with dependent health beneﬁ ts provided by the employer.

Lines 8 & 9.

The credit is limited to 50% of the Maine tax liability.

Line 11.

Enter the unused credit amount here. That portion of the unused credit not exceeding the 2-year carryover

period may be claimed on your Maine income tax return next year. This amount may be increased by any

amount on line 10 not utilized on Form 1120ME, Schedule C or Form 1040ME, Schedule A due to the use

of other credits.

Tax Credit For Dependent Health Benefits Paid Worksheet - Maine Revenue Services - 2007 Page 2

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